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Clipped Wings

Blacky Komani recalls the exact time he made the decision to suspend South African airline 1Time. Since then, he’s had a lot of time to think about what went wrong.

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The lights are out at the 1Time offices in Isando in Johannesburg’s East Rand. There’s no receptionist on duty and you can park in anyone’s parking spot.

It’s business unusual for the budget airline that went into provisional liquidation in November, leaving the airline with its wings clipped. But group CEO of 1Time Holdings Blacky Komani is trying not to flap and to keep his eyes on the horizon.

“It’s true I’m not sleeping at night, I keep thinking about what else I can do,” he says.

He’s sitting in the very boardroom seat where he made the decision to suspend all services that first Friday of November. He knows it was a Friday because the start of the weekend would be a critical factor in the perfect storm he says led to the airline being grounded.

“Once you’re in business rescue, which we were from August, you have to pay everything in cash and if it’s a weekend you have to pay for the whole weekend in advance. If you don’t have a proof of payment by 3PM on Friday for fuel and other expenses you’ll be grounded,” says Komani.

He says up until just 2PM that afternoon they were confident they’d make the deadline. Negotiations were looking good with UK-owned budget airline group Fastjet and creditors seemed likely to consent to a lifeline. But the storm got ugly, creditors baulked and Fastjet was sent scurrying.

At 2.23PM (he remembers the time exactly) he made the call for suspension of services, leaving hundreds of passengers stranded and his staff in tears and total shock.

“I didn’t believe it myself. I remember calling my wife, Pam, a little after we made the announcement. I phoned her but I couldn’t say the words ‘We’ve gone into liquidation’,” he says.

The 49-year-old from Kwelera, East London, had put up his Bryanston house as collateral when he, as one of six Mtha Aviation shareholders, went to the Industrial Development Bank (IDC) for a R49 million ($5.49 million) loan to buy a 25% share in 1Time. The deal went through in March 2011.

Komani, who lived in the States for 10 years, was in New York when the Twin Towers fell in the 9/11 tragedy. He says watching 1Time implode was like watching those towers crumble over 11 years ago. It was an emotional ground zero for him too. He shed tears publicly at the time and admits to being too overwrought to make media statements. He says he felt he let down his staff and members of public, who had come to trust the no-frills carrier.

“You feel so alone, like you’ve tried everything and it’s still not enough,” he says.

The abrupt halt to business could not have come at a worse time, just weeks before Christmas. This weighs heavy on Komani’s mind, and so too does the suicide of a pilot who was on 1Time’s payroll, just weeks after the airline was grounded.

It wasn’t supposed to turn out like this. For Komani entering into the airline industry meant merging his love for business and his passion for tourism. Giving travelers greater access to air travel across the continent had to be the next leap forward for tourism and business, he figured back in 2010.

But four factors created turbulence 1Time didn’t need.

“The World Cup didn’t deliver what we expected in terms of business opportunities. We acquired the maintenance facility Jetworx that came with its own problems. New player in the market Velvet Sky was taking a cut of passengers from us and when we’re talking about the low-cost arena, those last 10 passengers are what you need to stay in business. The final factor was that the oil price never dipped below $110 a barrel. Anything above that means you’re in a very tight position,” he says.

Critics—including trade union Solidarity, who had access to 1Time’s records during its period in business rescue—say 1Time was doomed with bad management practices. These included a glut of staff, especially at Jetworx, even when the airline was down to a fleet of seven aircraft; not clocking up enough flying hours a month; fat management incentive payouts when 1Time was floundering; and deficiencies in credit and cash flow management.

Komani doesn’t believe he fiddled while Rome burnt. He says they knew they were in trouble in May 2011. He says they started cutting costs and dropped three planes from their fleet of 10. Trimming the fat meant flattening their management structures, plugging leaks and stopping wastage and theft. They optimized flight schedules and Komani says he took a 10% salary cut and didn’t take bonuses.

“Ironically by October last year, just one month before we suspended flights, our records showed that the company had actually saved R30 million ($3.4 million) that year compared to the same figures from the previous year,” he says.

But it was too late. Even though they managed to sell Jetworx, saving around 250 jobs by February this year, liquidators were looking to divvy up the pie to creditors. Komani and his team’s big hope lies in UK-based Fastjet sealing the deal. Fastjet is the African version of Stelios Haji-Ioannou’s EasyJet venture in the UK. They will buy the company for R1 ($0.10) and inherit the R462 million ($52 million) debt. Fastjet’s designs are to broaden its pan-African flight route.

It’s a tricky deal. Fastjet, headquartered in Dar es Salaam, Tanzania, has been in dispute over unpaid leasing and maintenance bills to a Canadian aircraft leasing company. It’s also tangled up in an outstanding tax claim of around $2.4 million in the East African country.

Back in South Africa, the deal is still subject to the thumbs up by South African transport minister Ben Martins. 1Time will be hoping for a precedent-setting exemption to allow for more than 25% foreign ownership in a local airline to meet Fastjet’s majority shareholding aims. But other domestic airlines have objected to the application, saying it will erode the position of local aviation shareholders. A nod from the minister will give Fastjet international route rights without the company having to follow standard route license application processes, they say.

Komani sees it differently.

“I think the minister understands it’s an important decision around keeping the low-cost air travel model alive in South Africa, and also that there are over 540 jobs from the airline at stake,” he says.

Even if the deal comes through it could leave him out in the cold. He could be edged out as management structures are further pared down.

“I have a love of people and right now for me saving jobs is the most important box to tick. For me, I’ll come right one way or another.

“The lessons I learnt have been about implementing rescue measures early on and making sure they take effect as quickly as possible. Also that loyalty and leadership in tough times matters—anyone can be a good leader when things are going well,” he says.

Another worry on Komani’s mind is Skywise—brainchild of 1time founders Rodney James, Glenn Orsmond, Michael Kaminski, and Johan Bortslap, and more recently Wayne Duvenhage. The new budget airline is set to take to the skies in the second half of 2013, with three daily flights between Johannesburg and Cape Town and more destinations to follow. Skywise was granted an air service licence in March.

He may have lost his appetite for aviation right now but Komani’s trying to keep his focus and his sense of humor. So when asked the question: “Chicken of beef?” He says: “Right now, I think I’m on a diet”.

Entrepreneurs

Enterprise And Traceable Tea From Tanzania

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Tahira Nizari; images supplied

How this Tanzanian entrepreneur’s tea startup is weathering the Covid-19 storm.

When Tahira Nizari started her social enterprise Kazi Yetu in Tanzania’s bustling city, Dar es Salaam, with her business partner and husband, Hendrik Buermann, almost two years ago, she didn’t anticipate the sheer scope of her big idea.

But she also didn’t expect that, because of an employee’s exposure to the coronavirus in April, she and her entire team would be quarantining for two weeks, stalling work in a year that she had projected growth for her company. With the pandemic’s onset, she lost most of her customer base in Tanzania, albeit temporarily, and was forced to come up with a game-plan and quickly pivot.

“It’s been an economic recession overnight, more or less,” says Nizari.

With family roots in Tanzania, and armed with formal degrees from Dubai and Canada, and experience in economic inclusion in the non-profit development sector, Nizari aimed to set a benchmark in the agribusiness sector in Tanzania through value-addition and by employing local women in her factory based in Dar es Salaam to produce “a traceable product” for the local and international market.

“Right now, tea is just exported in bulk completely (from Tanzania) and then all the jobs thereafter in that value chain are done abroad. So what we said was ‘let’s redistribute that job creation, let’s bring it back to Tanzania and let’s create a facility in which we can hire workers all locally and have a product that is 100% made in Tanzania’,” says Nizari. After extensive research in multiple target markets, both locally and abroad, building relationships with 250 Tanzanian farmers, setting up a factory exclusively employing local and previously-unemployed women, and many iterations of the seven blends of its flagship Tanzania Tea Collection using local flavors and spices, Kazi Yetu was ready to expand its scope in 2020.

“We were following our business plan… but we were really cautious and risk-averse (in 2018 and 2019). And then, we said, ‘you know what, when 2020 hits, it’s going to be growth’.”

Nizari was planning on reaching up to 4,000 farmers, buy machinery from China, grow the local B2B customer base, permanently employ all the women at the factory and begin to export on a larger scale after the launch of Kazi Yetu’s online store.

But when the coronavirus hit the local and international markets, things started looking very bleak, especially since Kazi Yetu is currently fully self-funded.

 Not only did it lose almost all of its monthly income, but the farmers stopped meeting in groups for the training, so the supply chain was disrupted.

“In Europe, people are all sitting at home. They’re looking for products to build their immunity – tea is a great solution.”

The factory also had to introduce safety protocols for employees at work and at home, as well as reduce the number of people working at any given time in order to adhere to social distancing.

An employee’s father also died of the coronavirus, which forced Nizari to ask everyone involved with Kazi Yetu to quarantine at home for 14 days.

“So what we said was, ‘look, we don’t want to risk their safety, but we also don’t want to risk their economic well-being’. So we just paid all of them their full-time salary,” says Nizari.

“Generally, our operational costs have been really hard to cover right now… but it’s okay, because it made us pivot.”

It inspired Nizari to expedite Kazi Yetu’s plans to export, kickstart the online store sooner than anticipated and build up stock to send to Germany, rather than just focus on the Tanzanian market, which is temporarily quite small. Exporting has been an issue, given limited shipping at the moment, but the European market proved to be a pleasant surprise for Nizari.

“In Europe, people are all sitting at home. They’re looking for products to build their immunity – tea is a great solution,” she says.

Slowly, the factory is moving back to normal operations and Nizari is trying her best to ensure a steady income for the employees. Kazi Yetu is also now available on local delivery applications in Tanzania, so people can order tea to their doorsteps.

Looking ahead, Nizari hopes to scale up exporting through the online store and retailers, whether in Europe, or also in markets like South Africa where products from sub-Saharan Africa are popular, and North America where innovative African products are in demand.

“We want our product to be competing with products made in Europe, and for example, Sri Lankan tea, Indian tea and Chinese tea. We want Tanzanian products to be well-regarded,” she adds.

Since the teas are traceable, which is a unique selling point, Kazi Yetu is also working on an app that uses blockchain to allow customers to access data on the tea they purchase, from the farm level, all the way to their cups. This way, they will know first-hand the impact the product has.

In addition, Nizari is working on a farm-hub model to build Kazi Yetu’s supply chain by helping them produce better raw products through a no-interest investment that can be paid back with their final product over time.

“The whole ‘economy versus safety’ debate… it’s something we have to think about moving forward… You can’t just operate as a business that makes money, you have to think about… the well-being of your workplace, the well-being of everyone in your supply chain… And I think this is where social enterprises really come in,” Nizari adds.

And a hot cup of locally-produced tea can certainly help take forward any such deliberations.

By Inaara Gangji

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Entrepreneurs

Farmer Forays: ‘Creating A New Line Of Business’

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Shola Ladoja; image supplied

Nigerian agripreneur Shola Ladoja, the founder of Simply Green, says the pandemic-induced lockdown brought with it logistic adversity, but also more local sales.  

With the marauding coronavirus disrupting lives and businesses in Nigeria, the financial stability of a majority of the country’s 200 million inhabitants has been severely affected.

The significant toll it has taken on economic activities has forced many small and medium enterprises to reimagine new ways of staying afloat. Covid-19 is also set to radically aggravate food insecurity in Africa. In spite of Nigeria’s dependence on oil, agriculture remains an important cornerstone for its economy, providing employment for millions especially in the informal sector.

The threat of starvation is so present that in a public address in May, Nigeria’s President Muhammadu Buhari, urged Nigerian farmers to produce enough for the country to eat, saying that the country has “no money to import” food.

But every cloud has a silver lining. The food shortage has presented some agripreneurs in Nigeria with serendipitous opportunities.

Shola Ladoja is the founder of Simply Green, which is a farm-to-table company specializing in vegetables, fruits, juices, spices and herbs. The border lockdown has meant that many of the retail and supermarket chains can no longer import foreign produce into the country.

But this hurdle created a new opportunity for Ladoja.

“[Previously], I tried to get my juices into local stores in Nigeria but they all turned me down and most of them wanted to buy imported juices. The lockdown meant that they had to buy a local brand like mine because they could not get them from abroad anymore. We are now able to sell a lot more during this time than previous years,” says Ladoja.

On the logistics side, however, Ladoja has also felt the pinch of the pandemic like most business that require consistent movement of goods and services. The lockdown scenario prevented his workers from coming in and as a result, the company’s daily delivery of juices, has come to an abrupt stop.  

Ladoja has had to start thinking outside the box to make ends meet.

“We have come up with a fruit and vegetable box, which we sell directly on our website to our customers. So, they can now buy lettuce, kale and carrots, which we have never done before. So, this period has forced us to think about how we can expand the business and this time we actually created a new line of business, which was not in the plans for this year,” says Ladoja.

According to the United Nation’s Food and Agriculture Organization (FAO), even before the Covid-19 crisis, farmers had not been able to satisfy the demands of Nigeria’s population.

“I feel like the government should give out grants and loans and support for small businesses so that they don’t crash. I have friends who have complained they are going to shut down their businesses because they haven’t been paid for two months. A lot of people cannot sell their produce in Lagos because the markets are closed which is going to affect a lot of farmers at this time,” says Ladoja.

Nigeria used to import over a million tonnes of rice from Thailand annually. That number has been significantly reduced with the implementation of high import taxes. This has led to an abnormal increase in food prices in Nigeria since the onset of the coronavirus with the UN estimating the number of people facing acute food security stands to rise to 265 million globally in 2020 as a result of the economic impact of the pandemic.

Nigeria has substantially increased domestic rice production in the pandemic but is still a long way from reaching the levels needed for the country to sufficiently feed itself. Coupled with the decline in global oil prices, it is safe to say the adverse economic impact of Covid-19 on Africa’s most populous country is going to be felt for a long time to come.

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All For Grooming Future Leaders

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Katlego Thwane has had to dip into his own savings, with the Covid-19 crisis, to fund his noble cause, teaching the underprivileged in a South African township.

He is in his twenties, yet turning around the destiny of underprivileged young people around him.

Katlego Thwane, a 28-year-old born and bred in South Africa’s lively township of Soweto, is an educator and founder of the Atlegang Bana Foundation here that caters to primary school learners who struggle to keep up at school and need additional help.

“Our foundation also provides for needy learners from underprivileged backgrounds. One of my biggest campaigns at the foundation every year is to give confidence and motivation to learners for the year ahead,” says Thwane.

He has bagged numerous awards and accolades for his work, as a 2017 Young Community Shaper, 2018 Lead SA hero and featuring on live television show Big Up on SABC Mzansi in 2018.

Growing up, he was a “naughty boy”, as he describes himself, but says many are now astonished at the serious, ambitious young man he has become.

“Teaching has always been a passion of mine. I love seeing change, transformation and grooming leaders, and value their education while being innovative in taking our country forward.”

Thwane has recently established a clothing brand, BANA, under the Atlegang Bana Foundation. He is also currently handing out food parcels to the needy in his community, in partnership with Hollywoodbets.

“The virus has affected us immensely with many parents losing their jobs or taking salary cuts, we are not receiving the financial support as before. This has led to me [dipping] into my own personal pocket and [using it] to buy tutors data for teaching virtually,” says Thwane.

Most schools continue operating online because learners haven’t as yet returned to school, however, this has come with its share of setbacks.

Makosha Masedi, a parent of a Grade 4 learner, says her challenges come with network issues and understanding the tasks given to the child.

“Some of the programs that the work is loaded on to is not friendly for all devices, so submitting and retrieving becomes a problem, as also understanding some of the work,” rues Masedi.

But Thwane powers on, hoping for a better tomorrow, for himself and his country.

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